The purpose of this project is to investigate how observed family income inequality has been perpetuated in spite of and because of age-related changes among families and unrelated individuals. The goals for the second year include: 1) completing analyses on the relationships of age-related changes in family structures and family income inequality from 1947 to 1978; 2) extending these analyses to an examination of the structure of families, sources of income, and family income inequality for 1968 and 1978; and 3) evaluating alternative approaches for integrating models of income determination and family formation. In the analyses of both the published and micro-level data, attention is given to: 1) changes in the distribution of families by age of head; and 2) changes in the age composition of families. Methodological issues addressed include the adjustment of family income for family size, the smoothing of categorical data to improve comparability of inequality measures, and the determination of the effect of the allocation and sampling procedures used by the Bureau of the Census. The critical review of alternative approaches for the integration of models of income determination and family formation will evaluate existing micro-level theories and other approaches.